Updated Tuesday, January 29, 2013 at 10:49 AM
A former Pierce Commercial Bank senior vice president was sentenced Monday to 10 years in prison for a mortgage-fraud scheme that brought down the Tacoma bank, marking the culmination of a major criminal investigation that won convictions of nine other former bank employees, officials said.
Shawn L. Portmann, 40, pleaded guilty in September to conspiracy to make false statements in loan applications and documents submitted to the U.S. Department of Housing and Urban Development (HUD), as well as lying on loan applications.
Portmann and his co-conspirators made more than 300 fraudulent loans between 2004 and 2008, and caused more than $10 million in losses to the bank, investors and government agencies that provide mortgage insurance, prosecutors said.
At Portmann’s sentencing in Tacoma, U.S. District Judge Benjamin Settle said the scheme “escaped detection because it involved people at every level participating in the fraud,” according to a statement from the U.S. Attorney’s Office.
Eight other former bank employees — loan processors, underwriters, and a manager responsible for selling loans to secondary markets — have been sentenced to prison terms ranging from one to seven months, officials said, with a ninth former employee, Angel Young, set to be sentenced next month.
“Shawn Portmann’s greed destroyed dreams, ruined careers and defrauded millions from taxpayers,” U.S. Attorney Jenny Durkan said.
“The depth of his fraud helped bring down a bank, and haunted innocent homeowners whose communities were degraded with vacant, foreclosed homes and a precipitous decline in property values.”
Pierce Commercial received $6.8 million in aid from the federal Troubled Asset Relief Program in January 2009. The bank, which had about $221 million in assets in its final months, failed in November 2010 and didn’t repay the bank bailout.
The case was investigated by the FBI, HUD’s inspector general, the Internal Revenue Service, the state Department of Financial Institutions and the U.S. Postal Inspection Service.
Portmann was also sentenced to five years of supervised release.
He has agreed to forfeit $10 million he earned from the scheme and $102,000 in cash he had put in a backpack and given to a friend for safekeeping in February 2010.
“Although this sentencing does not erase the financial and emotional harm caused by Mr. Portmann to numerous victims — spanning homeowners harmed by the artificially inflated housing market to innocent bank employees who lost their jobs — I hope that they receive a measure of relief knowing that this unscrupulous predator is facing justice for his actions,” said Laura Laughlin, Special Agent-in-Charge of the FBI Seattle office.
Sanjay Bhatt: 206-464-3103 or firstname.lastname@example.org On Twitter @sbhatt